Apple’s new initiative to offer artists with spatial audio a higher cut of royalties has ruffled feathers among independent labels, as they believe it will potentially lead to a decrease in their earnings. They argue that this policy may favor companies with greater resources. Apple recently started offering a 10% increase in royalties to artists launching spatial audio tracks on Apple Music, however, this stems from the same fixed funds that are utilized to pay artists who do not provide the format.
Spatial audio, a product of Dolby Atmos technology, typically costs approximately $1,000 more for each song according to professionals who spoke to the Financial Times. They estimated that an entire album could cost ten times more, a cost that becomes even more significant when scaled to fit the potentially hundreds or thousands of albums a label might possess in its archives.
The Financial Times shared conversations with executives from Beggars Group, Secretly, and Partisan Records which are home to artists such as Vampire Weekend, Phoebe Bridgers and others.
One executive commented, “If [this policy] cuts between 5 and 10 percent from your global earnings, and not even due to songs underperforming but because you lose that revenue and it is redirected to Universal, the largest participant in the industry, we’re definitely worried. It’s already challenging to profit from streaming.” They aim to approach Apple to try and negotiate a more favorable agreement.
